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The recent boom in new home construction has finally begun [#permalink]
28 Apr 2012, 20:22

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Difficulty:

75% (hard)

Question Stats:

47%(02:05) correct
53%(01:05) wrong based on 342 sessions

The recent boom in new home construction has finally begun to taper off. Developers are notbuying land, contractors are finding themselves going without work for longer periods, andbanks are issuing fewer mortgages. People must not be as interested in buying new homes asthey were even six months ago. Which of the following indicates a flaw in the reasoningabove?A) Interest rates for home mortgages have increased significantly over the past six months.b) The average size of a new home has increased significantly over the past several years.c) Sales of condominiums have increased over the past six months.d) The cost of materials such as lumber and cement has decreased over the past year.e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over thepast year.

A) Interest rates for home mortgages have increased significantly over the past six months.--- Strengthen the argumentb) The average size of a new home has increased significantly over the past several years.-Not relevant c) Sales of condominiums have increased over the past six months.-Hold, this proves that people still want to buy condosd) The cost of materials such as lumber and cement has decreased over the past year.-Very tempting but it does not have a strong connection with the premises as in choice ce) Sales of other big-ticket items, such as automobiles and boats, has remained steady over thepast year.-Not relevant

Re: The recent boom in new home construction has finally begun [#permalink]
11 Oct 2013, 11:45

GetThisDone wrote:

The recent boom in new home construction has finally begun to taper off. Developers are notbuying land, contractors are finding themselves going without work for longer periods, andbanks are issuing fewer mortgages. People must not be as interested in buying new homes asthey were even six months ago. Which of the following indicates a flaw in the reasoningabove?A) Interest rates for home mortgages have increased significantly over the past six months.b) The average size of a new home has increased significantly over the past several years.c) Sales of condominiums have increased over the past six months.d) The cost of materials such as lumber and cement has decreased over the past year.e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over thepast year.

Wow, can't believe I got this one wrong. But well, let's see. My reasoning was..First, the conclusion: "People must not be as interested in buying new homes as they were even six months ago" because of X,Y,Z in the stimulus.Now what I thought inmediately after seeing (A) was it is not that people are not as interested in buying new houses, maybe they are but it is more expensive now, so they can't afford it. So (A) indicates a flaw in the argument.

Now answer (C) seems like a nice choice, but still the problem is that we can't actually assume that these condos are new homes, if they are existing ones then it does not weaken the conclusion at all

Re: The recent boom in new home construction has finally begun [#permalink]
15 Oct 2013, 01:28

2

This post receivedKUDOS

jlgdr wrote:

GetThisDone wrote:

The recent boom in new home construction has finally begun to taper off. Developers are notbuying land, contractors are finding themselves going without work for longer periods, andbanks are issuing fewer mortgages. People must not be as interested in buying new homes asthey were even six months ago. Which of the following indicates a flaw in the reasoningabove?A) Interest rates for home mortgages have increased significantly over the past six months.b) The average size of a new home has increased significantly over the past several years.c) Sales of condominiums have increased over the past six months.d) The cost of materials such as lumber and cement has decreased over the past year.e) Sales of other big-ticket items, such as automobiles and boats, has remained steady over thepast year.

First, the conclusion: "People must not be as interested in buying new homes as they were even six months ago" because of X,Y,Z in the stimulus.Now what I thought inmediately after seeing (A) was it is not that people are not as interested in buying new houses, maybe they are but it is more expensive now, so they can't afford it. So (A) indicates a flaw in the argument.

Now answer (C) seems like a nice choice, but still, I wonder what is wrong in my reasoning...Experts please adviceThanks

I am no expert but I an try and differentiate why C is a better choice than A.

A) Interest rates for home mortgages have increased significantly over the past six months. ---- Interest rates for home mortgages have increased does indicate a flaw but not as explicitly as option C. But you have to assume that the people interest depends on the interest rates. I think this is not stated anywhere in the argument and hence a bit too much to assume. It is not necessary that people buy homes with the help of a home mortgage.

C) Sales of condominiums have increased over the past six months.---- This directly indicates the flaw because if the sales of condos have increased more people are still interested in buying new homes. Perhaps there is are a lot of available apartments in the market right now so people are still interested in buying houses. An excess supply could also be a reason why developers are not buying land and contractors are out of work. And perhaps people do not need banks to buy condos. These were all just hypothetical situations but it shows that if people are buying condominiums, they are still interested in buying new homes.

Re: The recent boom in new home construction has finally begun [#permalink]
14 May 2015, 10:01

What is the conclusion in the argument?As per me it should be The recent boom in new home construction has finally begun to tapper off and assumption is people must have become less interested in buying homes.Please correct my logic

gmatclubot

Re: The recent boom in new home construction has finally begun
[#permalink]
14 May 2015, 10:01